A number of MUDs also have their own specialized native clients: Bedlam, Gemstone IV, etc, and many others have specialized web clients.

As a MUD client developer I am much more keen on generic protocols like MXP than game-specific ones like ATCP. Methinks MUDs should strive to work in as many clients as possible, although there are certainly benefits (and drawbacks) to releasing a client specific to your MUD.

There's also MSDP, MSSP, MCP. Google "mud protocol" and you will be well on your way.

ATCP2 is also known as GMCP. I prefer to use GMCP because it's basically JSON, not so much a protocol but a data-interchange format you can use to transmit any data you need to the client. The fact that it's JSON makes it very easy to parse in modern clients.

Quite a few custom clients have cropped up over the years, but the vast majority of MUDs don't even implement proper TELNET, let alone MUD protocols, let alone custom clients. KaVir's protocol snippet has made it easy for most Dikurivatives to add basic protocol support, but beyond that creating a UI requires a specialized set of skills.

A few months ago, I started The MUD Portal, a site providing a cloud-based web app and a flexible framework for building custom MUD clients. Hopefully, as the bar gets lower and lower, we'll see more custom clients for more games.

Are there or has there been any MUD servers which also supply client applications?

Is there a reason many MUD developers stick with the basic telnet client side?

Has there ever been a attempt to standardize a MUD protocol?

There are quite a few MUD protocols, with different degrees of standardisation, used by dozens if not hundreds of MUDs (and supported by the major clients). I actually created a snippet for the protocols I consider worth using (the only one I left out which I'd consider important is MCCP2) - see this thread for details. I also wrote an article about using protocols to enhance the user interface in the last issue of Imaginary Realities, which you can read here.

I think all development along these lines, whether commercial or non-commercial, is good for mudding in general. It draws attention from the outside world, promotes cooperation between client and server developers, and encourages competition between games (which in turn encourages innovation).